News Release

GINNIE MAE TO SECURITIZE NEW USDA RURAL DEVELOPMENT INITIATIVE

Washington, DC - Ginnie Mae announced today that the U.S. Department of Agriculture's Rural Development Multifamily Housing Program Section 538 guaranteed loans, which are used to revitalize section 515 loans, are now eligible as collateral backing Ginnie Mae multifamily securities. This product will complement Ginnie Mae's existing multifamily securitization products and will enhance the availability of multifamily housing for low and moderate-income families in rural areas.

"Ginnie Mae's ability to securitize this new use of section 538 and 515 loans is a real opportunity to help USDA ensure the continued quality and affordability of multifamily rural housing projects, especially older projects that need renovation," said Ted Foster, Senior Vice President of Mortgage-Backed Securities at Ginnie Mae. "Securitization could lower the cost of borrowing for developers as much as 50 basis points."

The USDA Rural Development Section 538 program provides financing for the acquisition, construction, or rehabilitation of multifamily housing in rural areas. The ability to use section 538 funds for rehabilitation of a Rural Development 515 property is a new initiative recently implemented by USDA. This government-guaranteed financing must be used for multifamily housing developments that serve very low- to moderate-income families.

Under the Section 515 program, USDA Rural Development makes direct loans to developers of affordable multifamily rental housing. As of June 30, 2006, USDA's portfolio of Section 515 loans encompassed 15,880 properties with 445,223 apartments.

Russell T. Davis, Administrator of USDA Rural Development's Housing and Community Facilities Programs, praised Ginnie Mae "for their commitment to help preserve rural America's affordable housing stock by providing the industry with this new securitization product."

Ginnie Mae securitization is available for loans with a September 1, 2006 issue date, and thereafter.

Ginnie Mae is a wholly owned government corporation within the U.S. Department of Housing and Urban Development. Ginnie Mae pioneered the mortgage-backed security (MBS), issuing the very first security in 1970. An MBS enables a mortgage lender to aggregate and sell mortgage loans as a security to investors. Ginnie Mae securities carry the full faith and credit guaranty of the United States government, which means that, even in difficult times, an investment in Ginnie Mae is one of the safest an investor can make.